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Real estate investing is a rewarding career that has grown in popularity in recent years. There are various ways to get involved in real estate investments, from leasing commercial or residential properties to flipping houses. Whatever direction you might be interested in, it’s essential to know what you’re getting into. Real estate is a tough market; most people won’t see instant success. If you’re invested in taking this on, it’s essential to avoid these five common mistakes.

No Plan

Know what you want to accomplish before you start looking at properties. Do you want to rent out a house? Great, that’s somewhere to start. Then you need to ask yourself questions like, are you going to do renovations yourself? How will you manage maintenance needs? Will you be able to make an income from it? It can be tempting to jump into a hot market and make a purchase quickly, but having a game plan in place and selecting properties you are prepared to handle is essential.

No Exit Strategy

Having an exit plan in place is a critical step before buying a property. If things don’t work out in your best-case scenario, how will you minimize loss? When cash starts to run short, you need to have the plan to shift course and be flexible to free up some funds. Depending on your specific situation, this might include wholesaling, flipping, tax-deferred exchanges, or other strategies.

No Research

If you buy a single-family home to rent out, but there’s hardly any rental market in the area, you might have difficulty finding tenants. This is why extensive research on your local area and the current market is crucial for success. Research can help you avoid overpaying for a property by getting a feel for price trends and help you find the most profitable areas to focus on.

No Collaboration

Real estate investing isn’t something you can or should, do alone. Be intentional about building your professional network and seeking input from other professionals. Especially early in your career, connecting with other local real estate professionals can provide invaluable insight and resources. It can also help you find suitable properties sooner before they get snatched up by other buyers.

No Reliable Financing

Be careful not to get caught up in bad financing deals. Adjustable rates, interest-only loans, and similar deals can sound appealing initially but quickly go downhill when payments change. Do your due diligence and ensure you are well-equipped to handle the payments for the lifetime of the loan.